Cyber insurance market continues to expand

The average takeup rate for cyber insurance is 24% across U.S. business, according to a new survey by the Council of Insurance Agents & Brokers.

Although takeup rates are increasing for businesses of all sizes, small and medium-sized business often balk at buying the coverage, according to the Washington-based CIAB's first biannual “Cyber Insurance Market Watch Survey,” released Wednesday.

“The majority of survey participants noted that it is still difficult to sell cyber insurance to most small and medium-sized businesses despite increased educational efforts and a national media spotlight on cyber security,” according to the survey. “These businesses still have a mindset that because they are smaller or don't store personally identifiable information; they're not likely to be a victim of cyber crime.”

The survey also found that 33% of companies that already had basic protection for network and data breaches sought additional coverage at renewal during the last six months. Companies are increasingly purchasing stand-alone policies rather than relying on professional liability, crime, property and general liability policies for protection, according to respondents.

“Despite challenges, the developing cyber insurance market is expected to remain favorable and expand,” according to the report.

The survey found that pricing appears to be fairly stable, with 56% of survey participants claiming that prices were flat. An additional 28% indicated an increase in pricing, while 16% reported a decrease.

“Broker experience varied by client type and revenue size, with health care and retail popping out as the industries seeing hardening in the market,” said the report.

The survey, taken in September, was based on the responses of 75 cyber experts working at 53 brokerages across the United States. It reflects a similar trend in cyber insurance takeup rates as other recent surveys.